John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the next in a series of posts I’ve been doing focused on Revenue Cycle Management (RCM). It’s been a fun series to do as I’ve explored more of the details of RCM and learned a lot along the way. Although, as is usually the case, the more that I learn the more I realize I still need to learn. I will be attending ANI in Las Vegas later this month, so I’m sure I’ll have plenty more RCM related topics to write about after that event.

You’re making a really important point with this story and it’s a topic we’ve discussed at length in my company. The availability of incentive funds is causing so much thought and energy to be focused on EHRs, but if a practice or hospital’s RCM is a mess, they’re losing far more money than the Meaningful Use dollars could ever reimburse them for.

What an extremely important question! I’m afraid far too many clinics are falling into this trap.

Each day I’m amazed a little bit more on the far reaching impacts of meaningful use on healthcare and EHR. There’s been amazing array of unintended consequences that are associated with meaningful use and the EHR incentive money and most of them aren’t good consequences. Sure, there are also some really great benefits to the government EHR stimulus money, but my fear is that they benefits won’t outweigh the negative consequences and the taxpayers will be out a cool $36+ billion.

Why do so many practices and physicians become so irrational when they hear about “free” government money for EHR? This I don’t have an answer to, but I hope by pointing it out more doctors will take a step back and do what’s right for their clinic. I’d expect in most cases this will involve EHR and technology, but Madelyn makes a really important point:

If your RCM is a mess, you could lose far more money than you gain from meaningful use.

Thanks for the callouts, John! I appreciate you bringing some much-needed attention to this point.

I’m hearing horror stories about doctors who use their EHRs simultaneously with paper records – printing out their electronic notes and pasting them into the same old manila folders – just for the sake of using EHRs to meet deadlines and get incentives. It’s such a shame that some providers aren’t realizing that there really are technology systems out there (RCM and EHR) that can actually save them time and money – especially when it comes to the revenue cycle.

Meaningful Use can definitely be a trap for those who don’t get the right system in pursuit of the cash. People really can’t afford to forget about RCM just because of the ‘free money.’

I am following your series on RCM. If you want a wealth of resources on RCM, the next generation RCM system and our advocacy positions on healthcare related issues, especially those relate to the lab industry, I encourage you to visit our website and take advantage of the content available there. Videos, white papers, blog posts, free webinars. I think it would be helpful in developing your blog in this area. Let me know if you have questions.

RCM has been ignored/trangressed long before the advent of EHRs and Meaningful Use. The problem is that many physicians don’t recognize issues with their revenue cycle until they feel financial pain. At that point, it’s likely that tens and hundreds of thousands of dollars have been left on the table. Often lacking knowledge of the business side of health care (and in some cases filled with hubris), physicians don’t realize all that’s involved in maintaining a well oiled, compliant and profitable billing cycle. There is too much variation among the hundreds of payers for a small billing team to be able to submit claims accurately, follow-up on every charge with carriers and patients, in many cases go to battle with appeals, and report results back to physicians.

If physicans hire bankers to handle their investments, lawyers to handle their legal work, and plumbers to handle their pipes, why leave the financial stability of their practices to anyone else but experts?

Similar to how RECs were created to assist in the adoption of Meaningful Use, I always thought it would be beneficial for the goverment to incentivize physicians to work with RCM experts to better their billing cycle. After all, that’s where the money is. In a system that wastes 30% of costs on overhead and administration, improving the overall cycle by just 5-10% could have profound effects. And doing so wouldn’t be difficult.

Web services make it eeasy and transparent for systems to have a two way digital conversation using standard interoperable internet protocols already used in healthcare. Next generation systems (like ours) allow all points of data, CPOE, EMR, EHR, LIS, HIS, etc. to have clear access to information that can only be found in the billing system. 5010, in particular, returns eligibility, coverage, patient responsibility/copay information and the physician’s office can have access to that data *at the time of order entry* reducing rejections, denials, appeals and all that back office cost that Sid is talking about above. We have launched a videocast series to go along with our recent white paper on these and other profitability leaks. Take a quick look here http://bit.ly/JT7NKc. Bolt-on ASP is no longer a “solution” it is 1980s technology being re-branded as “cloud” but true cloud data sharing is accomplished without hardware, software or IT struggles. Take 2 minutes and see what is possible by allowing web services to expose payor and billing data to *existing* CPOE and EMR systems.

Sidney,
Very interesting analysis. In many cases the doctors don’t trust the RECs, so that wouldn’t help to solve the RCM issues. I’ll have to think on the government incentivized RCM though. Shouldn’t the increased reimbursement be enough incentive?

You would think that increased reimbursement would be enough, but many times it’s not.

1) Many physicians are clueless, content and comfortable with what they have and what they believe is a good revenue cycle. They are indifferent to the concept of an “increase in collections”.

2) Physicians often develop relationships with their in house billing team to the point where it becomes difficult for them to part ways with staff members that have become part of their practice family, even if they aren’t doing a good job.

3) Health care publications are flooded with stories of shady RCM experts who’ve cheated their physician clients out of thousands and millions of dollars, which has cast a dark cloud over RCM service offerings.

4) Often time’s physicians perceive partnerships with RCM experts to be a strain on resources, a massive undertaking and a loss of control of their practice, which couldn’t be any farther from the truth.

Unfortunately, similar to how improved quality of care and workflow efficiencies wasn’t enough for physicians to adopt electronic health records, increased reimbursements isn’t enough of an incentive for physicians to work with RCM experts. In my experience with both cases, it’s usually not until mid-adoption or mid-partnership that the physician truly recognizes the benefit of both resources.

As I write this I realize, in both cases, the negative perceptions that physicians have of these resources and all that comes with them usually outweigh the positives, even though the positives are really worth fighting for. Good thing we have the government to light the fire under physicians’ butts. Or give them money 😉

Sidney,
Really great analysis on the RCM challenge. I’ve seen much of what you describe first hand. Although, I’ll be very surprised if the government starts subsidizing RCM like they are EHR. In fact, better RCM could cost the govt a lot more money since Medicare and Medicaid are some of the largest payors.

Thanks. I wouldn’t expect the government to subsidize RCM like they are EHR. Maintaining a healthy revenue cycle doesn’t require nearly as much capital as it does to keep an EHR vendor afloat. However, I am definitely a proponent of physicians being incentivized to improve their revenue cycle, regardless of what the incentive may be. It may initially result in a higher cost to payers, but at the same time I would expect to see a rise in physician profits resulting from a decrease in practice overhead and an increase in collection ratio. It would be interesting to see how and where the money would shift once providers started realizing an increase in profits. Providers may even appease stagnant or decreasing reimbursements if they knew it wouldn’t affect their profits.

[…] the Affordable Care Act, I wager that hospitals’ steely focus on Meaningful Use and ICD–10 will leave RCM projects shortchanged at first. But as the high-deductible bills keep building up, hospitals will squeeze in new RCM […]